News update
On the eve of Halloween, the first ever female UK Chancellor of the Exchequer, Rachel Reeves, delivered the long awaited autumn statement on behalf of the recently elected Labour Government.
The budget, as expected, demonstrated a significant shift in emphasis from the previous Tory regime and the measures being introduced will, it is expected, raise in excess of £40 billion in additional taxation. Coupled with changes to the fiscal rules that alter the way in which Government has to account for borrowing on infrastructure projects this was a huge tax and spend approach to the UK economy.
As far as the property market is concerned the major change was the announcement of an immediate increase in the second homes property stamp duty surcharge from 3% to 5%. This will, undoubtedly impact investors and landlords who may reconsider plans to expand portfolios and provide much needed rental accommodation. It is likely that the coming days and weeks will see many renegotiations of current transactions with prices being reduced to reflect higher buying costs.
It had already been confirmed that the threshold at which stamp duty becomes payable would revert in April 2025 to £125,000 from the current level of £250,000 and that the first-time buyer threshold will reduce from £425,000 to £300,000. This will, in effect, add £2,500 (2% on £125,000) to the cost of buying a property.
Capital Gains Tax was increased on the sale of many assets such as shares but fortunately was left untouched in regards property disposals.
On the spending side of the budget equation there was a commitment to spend £500 million more on helping create greater volumes of affordable housing and a change to right to buy which will see, as yet not confirmed, reductions in the discounts available for tenants to buy their own homes with local authorities now able to reinvest 100% of the proceeds from such sales in providing more affordable housing options.
There was, of course, much more in the budget and we will all have to watch with interest as the detail unfolds. Many of the measures are not due to be implemented for either a few months or even a few years.
As far as the local sales market is concerned, there was not a great deal that is likely to change the position for the majority looking to buy or sell. These decisions are largely lifetime and lifestyle choices and based on longer timeframes than the lifetime of a particular Government. Activity levels remain fairly consistent and we don’t expect to see much change in that outlook . Prices are steady and we expect those that have a strong motivation to move and are realistic over price will still find it straightforward to do so.
With kind regards.
John
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John Couch The Estate Agent43 Ilsham Road
Wellswood
Torquay
Devon
TQ1 2JG
Telephone: 01803 296500
Email: [email protected]
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